Smart Choices for the Smart Grid - Smart Grids

Addressing the challenges of smart grid implementation
Technological advancements have radically altered the world’s telecommunications networks over
the past decade. Yet another important network in our day-to-day lives — the energy distribution
grid — has been slower to evolve. That is about to change, however, with the proliferation of smart
grid technology.
The smart grid is generally characterized as the merger of communications-intensive IT applications
with the electric power systems managed by transmission and distribution system operators (TDSOs) —
outfitting 20th century electric grids with 21st century telecommunications technology. The smart
grid’s purpose? To create near-real-time control mechanisms that improve the quality of electricity
delivery, reduce carbon emissions, incorporate distributed energy resources, provide automated
demand response and reduce the cost of electricity to consumers.
A mature smart grid will comprise a number of integrated yet distinct applications that require varying
degrees of reliability, latency, availability, throughput, security and economic justification (not
only for the TDSO itself, but also in the eyes of public service commissions and municipal councils).
As such, TDSOs face many difficult choices with regard to smart grid implementation — in particular,
which specific technologies should be used to create the reliable, two-way communications paths
required for the operation of the smart grid infrastructure and for the data, video, voice and security
needs of the associated applications.
There are few easy answers. Different technologies are better suited than others for specific smart
grid applications, network geographies and customer demographics. The significant experience of
Alcatel-Lucent in designing and deploying mission-critical wired and wireless broadband solutions
provides unique insight into the challenges and choices faced by TDSOs. This paper explores some
of the more critical choices — both strategic (how to meet shareholder, regulatory and economic
objectives) and tactical (how the transformation translates into the procurement of specific products
and services) — that TDSOs face in weighing the merits of implementing wireless broadband services
and transforming the energy distribution infrastructure into a modern smart grid.
Network ownership vs. leasing of commercial services
TDSOs considering smart grid network improvements must first consider the advantages and disadvantages
associated with either owning their own network or leasing a network from a commercial
service provider. To maintain control, most TDSOs prefer exclusive ownership of the communications
and IT infrastructure supporting their operational networks. As well, owning the network is often
perceived as simpler: embedding commercial services — whether wireless or leased line — within
an integrated communications network complicates the physical and logical connectivity of the
architecture as well as functions associated with routing, reliability, security, regulatory compliance
and supply chain management.
Owning a private communications network, however, may not be an option for all TDSOs for reasons
of cost, lack of in-house network design and maintenance skills, or capacity to deploy applications
expeditiously. Moreover, owning such a network can extend technology refresh cycles. Commercial
service providers have extensive experience managing complex technology infusions according to
strict audit and regulatory standards, which allows them to regularly update and integrate new technologies
for consumer use. TDSOs can find this difficult to replicate. And while commercial service
providers can share the costs of such upgrades among many customers, network-owning TDSOs
must shoulder them alone.
Ultimately, the choice of whether to use commercially available services or to build and maintain
an independent network will be based on each TDSO’s network requirements and the associated
costs and business risks.
Smart Choices for the Smart Grid | Technology White Paper 1